Correctly Hearing Arbitration Judicial Review Cases and Promoting Healthy Development of Arbitration

- The Head of the Fourth Civil Division of the Supreme People's Court answered reporters' questions on the relevant provisions of the Supreme People's Court on reporting nuclear issues in arbitration judicial review cases and the provisions of the supreme People's Court on several issues in handling arbitration judicial review cases

On December 26, 2017, the Supreme People’s Court announced the relevant provisions of the Supreme People's Court on the reporting of nuclear issues in arbitration judicial review cases ( hereinafter referred to as the judicial interpretation of reporting nuclear issues ) and the provisions of the Supreme People's Court on several issues concerning the hearing of arbitration judicial review cases ( hereinafter referred to as the judicial interpretation of arbitration judicial review ). The Head of the Fourth Civil Division of the Supreme People's Court（Here-in-after “The Head”） was interviewed by reporters and answered their questions on relevant issues.

Reporter: the judicial interpretation of the nuclear issue and the judicial review of arbitration are scheduled to come into effect officially on January 1, 2018. may I know the drafting background and positive significance of these two judicial interpretations are Che?

The Head: the decision of the fourth plenary session of the 18th CPC central Committee clearly pointed out that it is necessary to perfect and perfect the diversified dispute resolution mechanism, perfect the arbitration system and enhance the credibility of arbitration. The characteristics of arbitration itself determine that its healthy and orderly development must rely on judicial supervision and support. In June 2016, the Supreme People's Court issued " opinions on the People's Court to further deepen the reform of the diversified dispute resolution mechanism", calling for strengthening the connection with arbitration institutions and actively supporting the reform of the arbitration system. In order to meet the needs of the development of the arbitration system and effectively solve the new situations and problems that arise, on the basis of full investigation, we have formulated judicial interpretations and standardized relevant issues in order to correctly hear arbitration judicial review cases and promote the healthy and orderly development of the arbitration cause.

The positive significance of formulating these two judicial interpretations is that according to the relevant laws and regulations of the civil procedure law of the People's Republic of China ( hereinafter referred to as the civil procedure law ) and the arbitration law of the People’s Republic of China, and in combination with the actual needs of the People's Court in handling arbitration judicial review cases, the legal application problems in arbitration judicial review cases are further clarified, the procedure of case review is effectively standardized, and legal support is provided for the People's Court to give full play to its judicial function, perfect and perfect China's diversified dispute resolution mechanism.

Reporter: compared with the original internal application system, what are the outstanding characteristics of the judicial interpretation of the nuclear reporting issue?

The Head: first of all, the establishment of the nuclear reporting system for arbitration judicial review cases in the form of judicial interpretation has given the system higher legal effect than the original internal notification document.

Secondly, clarifying the power of the Supreme People's Court or the High People's Court is conducive to fundamentally ensuring the unification of the judgment standards of cases and the correctness of the application of laws.

Third, the equal treatment of domestic and foreign-related cases and the uniform application of relevant regulations are in line with the trend of unified and centralized management of international and domestic arbitration judicial review cases.

Finally, on the basis of the original internal application system, the operating procedures and the functions of high and district people’s courts have been clearly detailed, making the system more transparent and standardized.

Reporter: article 1 of the judicial interpretation of the nuclear issue clarifies the types of arbitration judicial review cases. all arbitration judicial review cases are subject to this provision. may I know the main consideration is Che?

The Head: the original internal application system only applies to foreign-related hong kong, Macao and taiwan-related arbitration judicial review cases, and has not been able to establish an effective management, guidance and supervision system for non-foreign-related hong kong, Macao and taiwan-related arbitration judicial review cases. Bringing all arbitration judicial review cases into the scope of the approval system is mainly based on the following considerations:

First, the establishment of this system can effectively prevent misjudged cases of non-foreign related hong kong, Macao and Taiwan arbitration awards from being revoked or not implemented.

Second, one of the characteristics of arbitration judicial review cases is the final appeal of the first instance. according to the current laws and regulations, the parties concerned do not have the right to appeal, review and apply for retrial, and procuratorial organs do not protest against this. Once misjudged cases occur, the parties concerned lack effective remedies. therefore, the trial of arbitration judicial review cases must be cautious. In our investigation, we also found that some People's Courts have made mistakes in the application of the law in non-foreign related arbitration cases involving hong kong, Macao and Taiwan. The occurrence of misjudged cases is not conducive to protecting the legitimate rights and interests of the parties in accordance with the law. it will also have a negative impact on the judicial credibility of the People's Court, and is even less conducive to the healthy and orderly development of the arbitration cause. From another point of view, after the arbitration agreement is deemed invalid or revoked or the arbitration award is not executed, usually the parties can only bring a lawsuit to the People's Court to resolve the dispute, which objectively results in an increase in the number of cases received by the People's Court and at the same time increases the burden of litigation of the parties.

Thirdly, all arbitration judicial review cases will no longer be classified as foreign-related cases or non-foreign-related cases, and will be standardized in a unified way, which is conducive to the equal protection of the legitimate rights and interests of all parties concerned.

Reporter: what specific provisions does the judicial interpretation of the nuclear issue have on the right to review arbitration judicial review cases?

The Head: regarding the right to review arbitration judicial review cases, we have made different provisions on foreign-related cases involving hong kong, Macao and Taiwan on the basis of considering the number of specific cases in practice and the judicial power of People's Courts at all levels. Among them, the judicial review of foreign-related arbitration cases involving hong kong, Macao and Taiwan still adheres to the principle established by the original internal application system and provides for submission to the supreme People's Court for review. For cases involving hong kong, Macao and Taiwan that are not related to foreign affairs, it is required to be submitted to the higher People's Court for examination. however, if such cases exist where the parties have their domicile across provincial administrative regions, or where the arbitration award is not executed or revoked because it is against the public interest of the society, it shall be submitted to the supreme People's Court for examination, so as to protect the parties equally and carefully apply the principle of public interest.

Reporter: judicial review of arbitration judicial interpretation regulates the jurisdiction of applications involving related cases for recognition of foreign arbitral awards. how do you understand this?

The Head: in practice, some foreign arbitral awards are not located in our country at the domicile and property location of the respondent. however, due to the need to hear related cases, the applicant may need our country's courts to recognize foreign arbitral awards instead of implementing them concretely. In view of this situation, the judicial review and interpretation of arbitration provides that if the applicant applies for recognition of a foreign arbitral award, it shall be under the jurisdiction of the People's Court that accepts the related case or the intermediate People's Court where the arbitration institution is located. In addition, since such cases should be accepted by the intermediate People's Court, the judicial interpretation further stipulates that if the People's Court that accepts related cases is a grassroots People's Court, the case applying for recognition of foreign arbitral awards should be under the jurisdiction of the People's Court at the next higher level of the grassroots People's Court. If the People's Court that accepts related cases is a higher People's Court or a supreme People's Court, the above-mentioned court shall decide to review or designate an intermediate People's Court for review.

Reporter: judicial review of arbitration judicial interpretation gives the parties the right to appeal against an inadmissible ruling. the meaning of this provision is Che?

The Head: the main reason that gives the parties the right to appeal against the decision of inadmissibility is due to the consideration of unifying standards and protecting the legal rights and interests of the parties on an equal footing. First of all, article 154 of the civil procedure law stipulates that decisions not accepted can be appealed. although the review procedures of arbitration judicial review cases are different from the ordinary procedures, they should be treated equally with the ordinary procedures in terms of decisions whether to accept or not. Secondly, article 8 of the regulations of the supreme People's Court on the recognition and enforcement of arbitral awards in Taiwan, which came into effect on July 1, 2015, clearly stipulates that the parties may appeal against the decision of inadmissibility. In order to avoid the problem of different handling of the same case, we have also made such provisions in the judicial interpretation of arbitration judicial review.

Reporter: the court should rule to reject the application after the arbitration judicial review and judicial interpretation stipulate that the case is not in conformity with the conditions for acceptance. how do you understand this?

The Head: the provisions of this article refer to articles 208th and 212 of the supreme People's Court's interpretation of the application of the civil procedure law of the People's Republic of China ( hereinafter referred to as the judicial interpretation of the civil procedure law ) regarding ordinary procedures, and stipulate that in arbitration judicial review cases, if the People's Court finds that the conditions for acceptance are not met after filing the case, it shall rule to reject the application, and in cases where the application is rejected, if the applicant applies again and meets the conditions for acceptance, the People's Court shall accept it. At the same time, it is clear that the parties concerned can appeal against the ruling rejecting the application.

Reporter: the judicial interpretation of arbitration judicial review regulates the objection to jurisdiction. how do you understand it?

The Head: it is stipulated that the parties can raise objections to jurisdiction. the main reason is that since the jurisdiction courts of arbitration judicial review cases have clearly stipulated laws and judicial interpretations, the parties should also be allowed to raise objections to jurisdiction in such cases. If the party refuses to accept the ruling on the objection to jurisdiction, the party concerned may also file an appeal.

Reporter: if the law applicable to the seat of the arbitration organization and the law applicable to the place of arbitration in the judicial interpretation of arbitration judicial review will make different determinations on the validity of the arbitration agreement, the People's Court shall apply the provisions of the law confirming the validity of the arbitration agreement. how should it be understood?

The Head: this regulation is to accurately apply article 18 of the law of the People's Republic of China on the application of foreign-related civil relations. The article stipulates that the applicable law for confirming the validity of foreign-related arbitration agreements shall be divided into two levels. in the second level, it also stipulates two parallel options of the law of the place where the arbitration institution is located or the law of the place of arbitration. Starting from the principle of supporting arbitration, under the condition that the applicable law of the place where the arbitration institution is located and the applicable law of the place of arbitration have different cognizance of the validity of the arbitration agreement, we further clarify that the law confirming the validity of the arbitration agreement should be applied as the applicable law on the basis of the provisions of article 18 of the law of the People’s Republic of China on the application of the law on foreign-related civil relations.

Reporter: judicial review of arbitration judicial interpretation article 17 clarifies the legal application of applying for the enforcement of domestic arbitration awards and foreign-related arbitration awards. how should it be accurately understood?

The Head: this regulation is to accurately apply articles 237 and 274 of the civil procedure law. Article 237 of the civil procedure law mainly regulates the enforcement of domestic arbitration awards, while article 274 mainly regulates the enforcement of foreign-related arbitration awards. Among them, the content of article 274 of the civil procedure law existed in the " civil procedure law" promulgated and implemented in 1991. except for the adjustment of serial number, its content has not been modified. When the civil procedure law was promulgated and implemented in 1991, the arbitration law had not been promulgated. at that time, the foreign-related arbitration organizations were mainly the China international economic and trade arbitration commission and the China maritime arbitration commission. the two arbitration organizations only accepted foreign-related arbitration cases. therefore, article 274 of the civil procedure law was expressed as " if the respondent submitted evidence to prove that the arbitration award is under any of the following circumstances, the People's Court shall form a collegial panel to examine and verify it and decide not to execute it". the essence of this article is to stipulate the circumstances in which the foreign-related arbitration award should not be executed, while the enforcement of non-foreign-related arbitration award is stipulated in article 237 of the civil procedure law. Following the promulgation and implementation of the arbitration law of the People’s Republic of China in 1995, the general office of the state Council issued a notice on several issues that need to be clarified in the implementation of the arbitration law of the People’s Republic of China on June 8, 1996 ( Guo ban fa [ 1996 ] No. 22 ). According to the notice, arbitration institutions in mainland China can accept foreign-related and domestic arbitration cases, that is, there is no longer any distinction between domestic arbitration institutions and foreign-related arbitration institutions. Since different legal provisions need to be applied to the examination of the enforcement of foreign-related arbitral awards and domestic arbitral awards, in order to avoid ambiguity in the expression of relevant provisions of the civil procedure law, it is necessary to clarify the issue through judicial interpretation, that is, the People's Court shall apply the provisions of article 237 of the civil procedure law to the examination of non-foreign-related arbitral awards made by arbitration institutions in mainland China. The People's Court shall apply the provisions of article 274 of the civil procedure law to the examination of cases applying for the enforcement of foreign-related arbitration awards made by arbitration institutions in the mainland of China.

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*The original text is Chinese and has been translated into English for reference only. If there is any inconsistency or ambiguity between the Chinese version and the English version, the Chinese version shall prevail.